The Relaunch Decree: tax credits worth 110% of the value of home energy renovations

The Relaunch Decree has raised to 110% the value of the tax credits available for certain home energy renovation and seismic retrofit projects.

Published on 18 June 2020

Ecobonus 110% tax credits for home energy renovations

The tax incentive scenario for upgrading buildings is constantly evolving. After the Ecobonus and the Sismabonus, we now have the “Superbonus” introduced as part of the Relaunch Decree  (D.L. no. 34 of 19 May 2020, art. 119) to support the Italian economy in the aftermath of the Covid-19 crisis.

The term Superbonus refers to the latest big news causing a flurry of interest in the building sector. The Decree, in fact, has increased to 110% the value of the tax credits assigned for certain home energy renovation and seismic retrofit projects. These tax credits will be available to cover expenses incurred between 1 July 2020 and 31December 2021.

The other changes introduced by the Relaunch Decree include also the possibility for those qualifying either to directly avail of the tax credit, which is to be split into 5 equal annual amounts that can be subtracted from each year’s tax bill, or alternatively to receive a discounted bill from the firm carrying out the work in question (the firm receiving the tax credit directly in lieu of payment) or to opt for a transferable tax credit that can be sold or assigned to third parties. In many cases, these measures will essentially enable people to make improvements to their buildings cost-free.  

The 110% incentives will be granted if at least one of the following three improvements are involved:           

1.     Thermal insulation of vertical or horizontal opaque surfaces that cover more than 25% of the gross heat-losing surface of the building;         

2.     Replacement of a heating system (centralised systems for condominium buildings or autonomous for single-household buildings) with a Class A condenser boiler or heat pump;

3.    Seismic retrofitting for residential buildings located in Earthquake Zones 1, 2 and 3.

In the case of energy renovation projects, in order to obtain the maximum 110% amount, the building’s energy rating must see an improvement of at least two energy classes or, where this is not possible, the attainment of the highest energy class.  This fact must be demonstrated through an APE (Energy Performance Certificate) carried out both before and after the energy renovation is implemented.  If it is not possible to fulfil the conditions to receive the 110% incentives, tax credits at the “standard” rates can still be obtained and these vary between 50% and 85% depending on the type of work carried out.

If thermal insulation work and/or heating system replacement are taking place at the same time as other forms of energy renovation, such as the installation of EV charging infrastructure and the replacement of windows and window frames, then the latter will also qualify for the 110% incentive.

Photovoltaic systems and storage systems, on the other hand, qualify for the 110% incentive if installed at the same time as seismic retrofitting.   

The 110% tax credit is available to condominiums, private individuals outside of their business activity, arts and professions, on property units suitable as main residences, public housing associations, and shared ownership cooperatives. Only in the case of seismic retrofitting will the maximum amount be granted even if the work concerns single-family buildings used as second homes.

Another new feature introduced under the Relaunch Decree is the extension of the transferable tax credit mechanism to include also the Bonus Facciate and Bonus Ristrutturazioni schemes.  These bonuses, which incentivise respectively the renovation of building façades and home renovations, can be applied to expenses for such projects incurred between 1 January 2020 and 31 December 2020.

Finally, thanks to these new options introduced under the Relaunch Decree, now is the perfect time to undertake work to make your property more efficient and safer but also more attractive and comfortable, boosting its value and saving on bills. Everyone benefits: people, homes and the environment. 

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